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1. Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans

   • Nate Silver (pollster and renowned baseball statistician) takes issue with the methodology of this survey, do the authors have a response?

     http://www.fivethirtyeight.com/2010/06/are-you-smarter-than-george-mason.html

   • 5 comments
   • First comment 10 Jun 2010 by N. Joseph Potts
   • Last comment 25 Jan 2011 by John Stephens

2. Adam Smith, the Last of the Former Virtue Ethicists

   • McCloskey faults the project of the Enlightenment philosophers, Smith included, for neglecting two of the seven virtues of Thomas Aquinas: hope and faith (though she does claim these were smuggled in through the back door of their philosophies). I must admit to being puzzled about what use a secular moral philosopher should have for either virtue, both of which being explicitly based in religion.

     McCloskey describes hope and faith as two sides of the same coin, the forward-looking imagination and backward-looking imagination, respectively. Without hope, she tells us, there can be no ‘human project.’ Without faith, no ‘human identity.’ They do not, she asserts with no further explanation, ‘have to be theological.’ She implies that without hope as an independent virtue, suicide would be our only recourse, and without faith as an independent virtue, we would forget our identities. She claims that this makes the two virtues intelligible in secular terms, but as I can make no sense of any of it, I have to disagree.

     The ability to carry on projects that will bear fruit in the future does require a kind of simple “hope” that one’s plans will succeed. However, surely if this is all that hope consists of, skepticism must be a coequal virtue, otherwise the wasting of resources on impossible projects would be laudable and proper. And neither hope nor skepticism is an independent virtue, as hope could be described as prudence plus courage in imagination, and skepticism, prudence plus temperance in the same. Indeed, to an atheist, praying for eternal life perfectly fits the idea of “wasting resources on an impossible project.” I can understand hope as an independent virtue only in a specific theological context. The ancient pagan virtue ethicists also distrusted hope as a virtue, pointing out that hope adopted as a stable habit of mind would lead to continual bitter disappointment.

     With regard to faith, to twist it into a secular virtue when its commonplace meaning is the belief in a religion is to do violence to language and reason. McCloskey attempts to describe a physicist’s assumption of the orderliness of the universe as piety and faith (a faith slipped in stealthily whenever an Enlightenment philosopher refers to Nature), but it is nothing of the sort. She uses this poor argument against Rosalind Hursthouse’s reasonable contention that religious piety is “based on a complete illusion” from an atheist’s point of view and then rolls on to blame our uptight refusal to recognize the existence of hope and faith as independent virtues in Western philosophy for the rise of Bolshevism, Hitler, and “all our woe.” Despite violating Godwin’s law here, she declares her position defying two centuries of philosophy evidently correct, and “warmly recommends” her own flavor of non-secular hope and faith.

     McCloskey points out another way God allegedly sneaks in the back door in Smithian moral philosophy: through the idea of an impartial spectator. She claims: “The impartial spectator…is not merely [a behavioral observation] about how people develop ethically. [It is a recommendation.]” This assertion stands in baffling contradiction to much of The Theory of Moral Sentiments, which painstakingly describes a positive process of an individual judging the propriety of actions he observes or proposes to undertake with recourse to sympathizing with an imagined impartial spectator. TMS is not a long harangue from “an urbane resident of Edinburgh…hopeful for a rather better society, loving sweetly the imagined result” exhorting its readers to follow a system of virtues. It is principally a description of a positive system of moral philosophy: how we in fact judge the propriety of actions, not how we ought to. Though Smith often lets his values and opinions leak through to color the text, to an extent unfashionable among modern philosophers but charming in this case, the meat of the book is about how humans act, not how Smith believes they should.

   • 4 comments
   • First comment 22 Sep 2010 by Steve Kunath
   • Last comment 05 Oct 2010 by John Robinson

3. Advanced Placement Economics: The Good, the Bad, and the Ugly

   • I totally concur with this article. I had three kids of mine go through AP economics, both micro and macro. I was appalled – the material was 30 years behind the times, both micro and macro. AP economics is confirming the worst stereotypes of what economics is about. And it was boring, boring, boring, even to me.

   • 4 comments
   • First comment 25 Jan 2011 by Paul Johnson
   • Last comment 16 Mar 2011 by David B

4. The Ideological Profile of Harvard University Press: Categorizing 494 Books Published 2000-2010

   • The percentages in Table 1 are difficult to interpret. There are no 100% totals in this table so we can’t tell if the cell percentages are column percentages or row percentages. With effort, one can determine that all the percentages — except those in the bottom row — are column percentages. Putting 100% totals at the bottom of each column would facilitate understanding. , Showing the prevalence of each subject area could be done in the column titles, in the body or in a separate row below the 100% column totals.
     Figure 1 would have been more useful if the percentages were of “All Ideological HUP Books Surveyed” so the percentages would add to 100%.

   • 4 comments
   • First comment 24 Jan 2011 by Hal Luft
   • Last comment 16 Feb 2011 by Milo Schield

5. The Liberty of the Ancients Compared with that of the Moderns

   • Constant’s speech flows effortlessly, enumerating the distinctions between ancient and modern conceptions of liberty. Ancient liberty “consisted in exercising collectively, but not directly, several parts of the sovereignty” and “with this collective freedom [came] the complete subjection of the individual to the authority of the community” (66). Under ancient liberty, “[a]ll private actions were submitted to a severe surveillance” and “[n]o importance was given to individual independence” (66). Modern liberty exists in a system of representative government, rather than direct participation. Modern liberty is “the right to be subjected only to the laws” (66). Constant summaries the key distinction nicely: “[A]mong the ancients the individual, almost always sovereign in public affairs, was a slave in all his private relations” (67). “Among the moderns, on the contrary, the individual, independent in his private life, is, even in the freest of states, sovereign only in appearance” (67). A paradox seems to emerge with respect to ancient and modern liberty. While we want modern liberty, it is still necessary to keep ancient liberty in the background. “The danger of modern liberty is that, absorbed in the enjoyment of our private independence, and in the pursuit of our particular interests, we should surrender our right to share in political power too easily” (70). Constant warns against putting too much faith in authority figures. He pleads that “we must not leave it to them. No matter how touching such a tender commitment may be, let us ask the authorities to keep within their limits. Let them confine themselves to being just. We shall assume the responsibility of being happy for ourselves” (70). It seems that the dangers of modern liberty are very real and present today. Individuals often look for the government to be more than just. The government is regulating personal happiness through various policies that go against liberty. It’s a slippery slope and Constant would call for us to take responsibility.

   • 4 comments
   • First comment 15 Apr 2011 by Ariel Nerbovig
   • Last comment 06 May 2011 by Stephanie Myla Helmick

6. Preference Falsification in the Economics Profession

   • While I agree with the overall point that Davis presents in the paper—that of preference falsification existing within the economics profession, I’m really wondering if the division into scholastic and public-discourse sections is nothing more than a division of labor, and as such should not be “changed” by the lay person. Granted, I’m not spending much time reading articles out of the top journals, because I honestly couldn’t understand the math anyway, but it seems likely that those articles get published, hopefully separating at least somewhat the wheat from the chaff, then some professor or researcher with good scholastic and nominal communication skills writes to other professors who have less scholastic and better communication skills, and then the Russ Roberts’ of the world apply the relevant research to public topics. If that flow of information could be possible, then the part that is self-referential, -validating, and -perpetuating is only the original publishing tier, while the professor/communicator levels are more and more responsive to the lay person’s choice (if it really is the lay person that should be choosing what is discussed, but that’s another question). It is probably always going to be true that the best researchers will not be the best communicators, though Davis’ paper seems to imply that the two orientations of the economics profession should be inhabited by the same person. While that sort of super-human-ness certainly is nice, it seems rare that one would be able to skillfully perform both roles, and so a revolution toward such a system would be attended by very few people.

     Now, one could say that a piece of work may become “less relevant” (and I think that is one of the main points here, that the profession/top journals are becoming less relevant) because it becomes less understandable to others, or because it becomes full of information that is not true. My ‘division of labor’ notion is based on the understanding that when Davis says on p. 363 “economic science has not improved its explanatory capacity of the last several years” and reports comments from survey-takers on p. 364 that the profession “fails to explain observable events,” “gain[s] an elegance of sorts but at the expense of relevance,” he is saying something about how more and more, in the top journals, there is high-theory/math-heavy work that is not understandable to the intelligent layperson (or the masters student). “People want to understand the economy, but we are not helping them.” That is; the top journals are not helping them. I think that that is a fine situation. If there is anything to be gained by model-production and heavy statistical analysis, then better mathematicians and scientists can produce those results, and other people can do a better job than they can in transmitting the results.

     If Davis and his respondents are stressing that not only has the top-tier journal become more incomprehensible, but more full of false or inconsequential information, and the preference falsification is supporting this propagation of nonsense, then obviously a view of the profession as division of labor would fall short, as the input stage is being fed by garbage. Davis doesn’t quite make clear whether the “less relevance” of the scholastic tradition is producing true and potentially useful data that is incomprehensible, or false and irrelevant data.

   • 3 comments
   • First comment 21 Apr 2010 by Jon Goldstein
   • Last comment 22 Apr 2010 by Shawn Reed

7. A Life among the Econ, Particularly at UCLA

   • A wonderful remembrance! Although not a major in Economics, I had Alchian for Econ 101 (for non-econ majors?) in the mid 1950s, and a year or two later, a grad seminar with Allen (and someone else) on Internat’l Econ Development. Also, had Hildebrand for K. Marx econ. With the help of Prof Allen’s retrospective, I am now inclined to even greater appreciation than at the time—-partly for their inculcation of an economic perspective but mostly for their character.

   • 3 comments
   • First comment 08 Sep 2010 by morrie goldman
   • Last comment 17 May 2011 by josil

8. "The Two Faces of Adam Smith"

   • The Adam Smith Problem has beset philosophers and economists since the time of the man who is its source. What is the best way to integrate the insights of the Wealth of Nations with the ethical theory of the Theory of Moral Sentiments? While consensus has not yet been reached authors still try to resolve the tension. Vernon Smith, the father of experimental economics, attempted to resolve the problem by making an appeal to Adam Smith’s description of the propensity to truck, barter, and exchange.

     The propensity that Vernon Smith points to is certainly a component of Adam’s system, but in attempting to resolve the Adam Smith Problem by simply highlighting this propensity seems to ask forces other questions into focus. Assuming that Adam Smith had a singular vision of human nature in some sense, where does the individual’s propensity to exchange emerge? According to David Hume reason is a slave to the passions, which Adam Smith would have been familiar with as it affected the development of his own moral theory. Here a problem arises, if the propensity to exchange is simply the result of an innate principle of action, as Vernon Smith implies, then one needs to determine if this action falls under ethical scrutiny or not. If Adam Smith does not consider natural and uncontrolled actions of the individual, e.g. sneezing, twitching, worthy of ethical consideration as they fall outside of the realm of the individual’s control and thereby are incapable of being done in sympathy with the Impartial Spectator, then how does one square a natural principle with ethical analysis? Perhaps if Vernon Smith had described the propensity to exchange as some type of irreducible good then we could see that it could then serve as a reason for action that would first be described by and ethical system, i.e. it would be fitting to discuss in the Theory of Moral Sentiments, and then followed by sound advice on instantiating the good in ones affairs, i.e. the Wealth of Nations would give advice on making it a reality. The point of all this is to say that while Vernon Smith seems to be making a contribution to solving the Adam Smith Question, we are left with further questions that need to be answered.

   • 3 comments
   • First comment 25 Apr 2011 by Echo Keif
   • Last comment 06 May 2011 by Steve Kunath

9. Individualism: True and False

   • Using the contrast between two philosophies that both have been referred to as individualism, Hayek outlines many of the usual justifications for a government and an economic system built around precepts of individual liberty. He tracks the intellectual history of the word “individualism”, claiming that what he calls false individualism leads inevitably to socialism and collectivism. He praises true individualism as worthy because it produces the most desirable results; false individualism has been wrongly associated with it and thus usurped its meaning.
     Hayek argues that the basic principle dividing the two philosophies is their differing conceptions of human nature. False individualism is more or less an overconfident humanism, while true individualism freely admits to human foibles and limitations. Thus, people who subscribe to false individualism have inflated expectations that men can rationally design the perfect society. Hayek argues for property rights, limited government, free exchange of goods and services, and the price mechanism built on the idea that men are fallible. The order in society develops unintentionally from the choices that free people make. Hayek’s defense of a classical liberal society on these grounds is utilitarian and compelling.
     It is somewhat surprising the particular battle lines Hayek drew. He equates true individualism with the Anglo-American culture and its associated thinkers, like Adam Smith and Hume, while pointing to French thinkers following in the tradition of Descartes as the primary source of false individualism. Hayek claims that German culture has yet another sense of the word individualism, which is the rejection of historical tradition as a source of authority over one’s behavior. It is an interesting division but a little difficult to believe that nationality follows the divisions between the intellectual traditions so simply.
     The most surprising point in the essay is Hayek’s effort to demonstrate that liberty and cultural traditions are consistently compatible. Cultural norms develop from a spontaneous order that reflects the process of the market. Hayek argues that respect for naturally evolving norms, rather than designed ones, encourages respect for the power of spontaneous order to produce the most desirable outcomes. His assertions seem to match the historical outcomes of the French Revolution, which ended with a military dictatorship, and the American Revolution, which resulted in a system of government with a strong presumption of liberty. The former tried to radically remake the society but the latter was simply an assertion of principles deeply ingrained culturally.

   • 2 comments
   • First comment 22 Sep 2010 by Tony Quain
   • Last comment 06 May 2011 by Stephanie Myla Helmick

10. Adam Smith and Conservative Economics

    • Here Emma Rothschild examines the various schools of interpretation of Adam Smith’s works that emerged shortly after his death. Specifically, she looks at three incidents where Smith’s ideas were used to support a particular policy or school of thought. Starting with the idea that Smith was, at least in a way, an indirect supporter of the French Revolution movement, she then discusses how an early biographer attempted to fundamentally redefine Smith’s understanding of freedom, Her final example shows how certain philosophers and statesmen in England attempted to confirm their own policies and positions by making reference to Smith and saying that his writings were in line with their policies.

      At this point an individual could justifiably ask what all the fuss is about. Does it really matter if Smith would have been a supporter of the French revolution, labor laws, or any other piece of trivia a historian is trying to suggest is important? They might continue and say that Smith opened up the door to modern economics and it is really not important to immerse oneself into the squabbles of the late 18th century. I answer, however, that it does matter and that Rothschild’s piece allows readers today to better understand the state of the world we now find ourselves in. Generally, when Adam Smith’s name is thrown around it is used to talk about the early development of the free market system and economics. If the average individual, and I daresay the average economist, is pressed to provide more details about who Adam Smith was and what his contributions were, they might make vague references to The Wealth of Nations and then completely skip over the career of Smith or even his earlier work on moral sentiments. The general lack of knowledge about Smith’s corpus or about even the general orientation of his work can lead to contradictory interpretations and is in the end what Rothschild’s essay points to.

      Economists, like individuals in many other fields, operate with many assumptions about how individuals operate. The modern turn has brought in primarily utility or Paretian ideas of maximization. While this move is justifiable at least from the perspective of making problems more tractable it fails to make a strong connection to the ideas of the individual that Smith would have assumed. Smith spilled much ink in the Theory of Moral Sentiments on the motivations and dispositions of the individual. Today there are, just like Rothschild’s examples, different schools of thought within the academy on how to correctly interpret Smith and apply his principles to current problems. The fact that these differences exist must be pointed out and once identified a real discussion must take place to understand what Smith is really saying, whether what Smith has said fits with our current knowledge, and only then can we really come to an understand of what liberty is and how it should be enshrined in our civilization. Rothschild’s essay provides a good first step in that direction.

    • 2 comments
    • First comment 07 Oct 2010 by Steve Kunath
    • Last comment 19 Oct 2010 by Brian Bedient

11. Is Economics Independent of Ethics?

    • This article does an exceptional job of arguing against the idea of economics as “separate from and independent of ethics” (3). Jack High rejects the independence doctrine, which separates economics as a positive science from economics as policy advising tool. A key example demonstrates that coercion and voluntary action cannot be defined outside of ethics. Ethics plays a crucial role in guiding economists towards the proper benchmarks.

      I agree with the premise that ethics has a definite place in economics, but I also think it is important that economists carefully define which ethical values they are subscribing to and if those values are in fact appropriate. Ethical values are latent in the most commonplace economic notions, for instance Pareto efficiency and the entirety of welfare economics are loaded with ethical prepositions and implications. The key is to recognize these ethical frameworks rather than try to suppress or obscure them from view.

      My only disappointment with this piece is the way that High ends his brilliant discussion. He says that “accepting the proposition that economic definitions depend on ethical judgments does not involve the economist in taking a stand on moral issues…. “value-freedom of economic science” is left untouched by the central thesis” (15). This back pedaling weakens the strength of his previous arguments and ignores that the use of ethical judgments is itself a commitment to those judgments. Accepting ethics as a part of economics does involve taking an ethical stand. The whole point is that we cannot escape this admission. We cannot be value-free.

    • 2 comments
    • First comment 15 Apr 2011 by Echo Keif
    • Last comment 22 Apr 2011 by John Robinson

12. Adam Smith and the role of the state: education as a public service

    • Throughout the chapter Andrew Skinner grossly overstates the scope of Adam Smith’s support for state action. Skinner repeats Jacob Viner’s assertion that Smith “saw a wide and elastic range of activity for government, and was prepared to extend it further.” Viner’s view guides Skinner, but Skinner provides poor support for his notion of Smith the statist. He misinterprets the following direct quotation from the Wealth of Nations in a key part of his argument about education:

      “The expence of the institutions for education and religious instruction is likewise, no doubt, beneficial to the whole society, and may, therefore, without injustice, be defrayed by the general contribution of the whole society. This expence, however, might perhaps with equal propriety, and even with some advantage, be defrayed altogether by those who receive the immediate benefit of such education and instruction, or by the voluntary contribution of those who think they have occasion for either the one or the other.” (V.i.i.5)

      Skinner claims the passage makes it seem “likely that Smith would have supported the arrangements he envisaged for elementary education, where there is a combination of modest private, and a more significant public, contribution.” Reading the Smith quote, and going back to the entire section of the Wealth of Nations that Skinner refers to, Smith mentions nothing about any significant public contribution to education at any level. Indeed, not only above, but throughout his discussion of education Smith stresses that the cost should be primarily – if not entirely – borne by the beneficiary of the service.

      It is true that Adam Smith did support some government activity; any careful reading of his works shows the scope of that activity to be far more limited than Skinner implies.

    • 2 comments
    • First comment 22 Apr 2011 by Ariel Nerbovig
    • Last comment 24 Apr 2011 by Brandon Holmes

13. Economic Enlightenment Revisited: New Results Again Find Little Relationship Between Education and Economic Enlightenment but Vitiate Prior Evidence of the Left Being Worse

    • How did you intend the word “purported” to be interpreted, with respect to your article?

    • 2 comments
    • First comment 17 May 2011 by rihir akidan
    • Last comment 06 Jun 2011 by Scott Garren

14. The Social Science Citation Index: A Black Box—with an Ideological Bias?

    • After a Google keyword search of “Commentary Magazine” and “Social Science Citation Index,” I found this article and was introduced to EJW. The bias Klein and Chiang illuminate, exists not only in the slant of the SSCI journals which make and break careers, but also the themes and questions addressed at major conferences and their panels. (Just take a look at the CfP for next year’s APSA annual.) Now finishing up a PhD and finding the same problem on the job market, the research backgrounds often asked for (my area is IR/ IPE) also come from left field. Rather than become disheartened, this state of affairs increases my resolve to follow and intelligently express my conservative convictions in the face of single minded institutionalized opposition. I love a good fight and know the truth will prevail. I’d rather be right than loved, although it would be nice to be both.

    • 1 comments
    • First comment 01 Nov 2011 by Alex Littlefield
    • Last comment 01 Nov 2011 by Alex Littlefield

15. From Friedman to Wittman: The Transformation of Chicago and Political Economy

    • Caplan offers a balanced and even favorable description of Wittman’s argument in “Why Democracies Produce Efficient Results” (1989). Wittman objects to most of the public choice literature because it assumes extreme voter stupidity. Instead of assuming voters are ignorant, critics of the government are actually assuming that voters are systematically biased in their beliefs. Wittmann also points out that voters are not as gullible as public choice theorists assume. They use parties like brand labels, which make the voting problem much easier than it might appear. Wittman is also skeptical about complaints of a lack of political competition. He points out that very few unpopular policies persevere because unpopular policies lose votes. Furthermore, incumbents are reelected because they are better than the competition. Wittman finally points out that democracy lowers negotiation and transfer costs.

      Caplan perceptively points out that Wittman’s position is valid, but not sound. While his assumptions lead to his conclusion that democracy is efficient, he commits a fatal flaw by assuming that voters are rational. Caplan’s work in economic beliefs and the systematic bias that exists among non-economists and the less educated weakens the validity of this assumption. Caplan’s theory of rational irrationality, that people are more irrationality when the cost goes down, seems to be the nail in the coffin for Wittman’s theory. Rational public opinion is in fact a public good. Adam Smith had it right when he asserted that perverse policies were the result of systematically biased beliefs.

      The most important message from this article is that empirical testing is necessary for good theory. We cannot assume that voters are rational without testing if that is really the case. Economists must move beyond blackboards and untested behavioral assumptions if we are to make any real progress in our field. Caplan is a brilliant example of this philosophy.

    • 1 comments
    • First comment 11 Mar 2011 by Echo Keif
    • Last comment 11 Mar 2011 by Echo Keif

16. The Problem of Social Cost

    • “When an economist is comparing alternative social arrangements, the proper procedure is to compare the total social product yielded by these different arrangements. The comparison of private and social products is neither here nor there.” (p.34)

      These two sentences are charged with a number of points. First, can we measure total social product? Second, is it true that comparing private and social products is “neither here nor there”?

      Coase’s injunction that economists must compare total social product resulting from different arrangements of property rights presumes that economists can in fact do this. Unlike his zero-transaction cost assumption, I think he actually means this to happen in the real world – this is in fact the real work of economists in his mind. The problem is that arriving at net social product is so laden with transaction costs that it is impossible to do, just like Hayek’s argument about social calculation of prices. One can make gross calculations and assumptions about the real social costs of particular property rights arrangements to individual actors at a given time, but these will never arrive at the true social costs because discovering all the ramifications of even seemingly innocuous assignments of rights can have far-reaching, unseen consequences in a connected economy.

      Coase argues in this paper: “It is always possible to modify by transactions on the market the initial legal delimitation of rights” and those transactions would always take place if they were costless and “lead to an increase in the value of production” (p. 15). Since transaction costs are not in fact costless, we know that their existence eliminates many transactions. Negotiating with many rights holders for access to a water source for example may prove too high due to transaction costs, even if the actual cost of purchasing the rights might not be that high.

      Furthermore, it is not always possible to engage in market transactions after an initial delimitation of rights because part of the delimitation of rights may include non-transferability (inalienability). For example, I have the right to vote, but my right to vote is non-transferable – I cannot use the market to arrive at a higher social product. I may be better off if I could sell my vote, since at the margin it is relatively worthless.

      The argument that private product does not matter, and only social product matters is a strict utilitarian argument and does not proceed from any lasting or predictable principle. This provides little or no guidance to government actors on how to make allocations of rights. Some violations of private product may appear to result in an increase in social product (which is, again, virtually impossible to measure), but are repugnant to our values as individuals.

      This is a very interesting article that has a lot to teach us, but I think its flaws hinge on the assumption that we can rebuild a philosophical framework from the point of zero-transaction costs, even if we acknowledge that this assumption is strictly a means of getting at the underlying issues.

    • 1 comments
    • First comment 22 Apr 2010 by Mark Bonica
    • Last comment 22 Apr 2010 by Mark Bonica

17. Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?

    • Hello Mr Brad R Humphreys and Mr Dennis Coates. my name is Rizky. You can call me Rizky. i am undergraduate student at Departement of economics-Gadjah Mada University in Yogyakarta province-Indonesia.

      Mr, i am very interested with your journals. Your journals really inspired me to write the same things related to soccer (football) in Indonesia. football research in Indonesia very rare, especially describing the relationship football and economy. i want it is used for my thesis and i hopefully be useful to progress football in Indonesia.

      Mr, I have many questions. what motivates you to write and interest about the economics of sport?

      maybe this is my first question. I hope to discuss with you a lot. thanks a lot for your attention. nice to meet you Mr

      Best Regards

      Rizky F

    • 1 comments
    • First comment 19 Jan 2011 by rizky
    • Last comment 19 Jan 2011 by rizky

18. Gulphs in Mankind’s Career of Prosperity: A Critique of Adam Smith on Interest Rate Restrictions

    • In the excerpts from letters Bentham wrote to Smith, Bentham takes to task Smith’s belief that rates of interest should be capped to prevent usury. Approaching his former teacher with repeatedly expressed respect, Bentham uses many of Smith’s own beliefs and arguments to attempt to persuade Smith to recant his defense of usury laws. In pointing out that capping interest chokes off financing possibilities for projectors, Bentham’s pleas to Smith are a brilliant early defense of what we now call entrepreneurs.

      Smith never revised the section of Wealth of Nations that covers usury or his views on projectors; though one historical account shows that Smith essentially admitted in private that Bentham was correct. In the editor’s preface Dan Klein says he fancies the idea that Smith’s awareness of his own cultural status in Scottish society and desire to protect it prevented him from attacking usury. Klein also speculates that “Smith was telling Bentham that we do not want to unbridle ambition and proud genius, because of the frightful hazards of unleashing them in the governmental realm.”

      If Smith understood the value and importance of the projector (entrepreneur), why couldn’t he have revised Wealth of Nations to defend the projector—even if he maintained his defense of usury laws? Smith could have used his influence to carve out a legitimate place for projectors, and their projects, and left the task of going after usury laws to Bentham and others (as ultimately happened). Klein notes that some have considered Bentham’s essay the “beginning of the modern world.” If the defense of the projector is of this great importance, and Smith realized it, why would he leave his censure of projectors intact in the final version of Wealth of Nations? Despite Klein’s defense, it still makes sense to ask whether Smith had a sufficient enough understanding of the importance of projectors for economic growth and human betterment.

    • 1 comments
    • First comment 11 Mar 2011 by Brandon W. Holmes
    • Last comment 11 Mar 2011 by Brandon W. Holmes

19. Where Would Adam Smith Publish Today? The Near Absence of Math-free Research in Top Journals

    • I agree with Sutter and Pjesky’s observation. Their article brings to light a change that has occurred within the economics profession of slowly becoming a club exclusive to the profession (and hierarchical within). They also bring to light a more fundamental point about economics: Would Adam Smith want to publish in one of the top journals?

      Adam Smith actively participated in public discourse. See Klein for a good discussion on public discourse in modern economics. There are few examples, if any, of a recent article in a top journal that is directed towards public discourse. Economists write for other economists.

      Many of the great minds cited by Sutter and Pjesky such as Smith, the Mills, and Hayek also engaged in public discourse intended to reach audiences beyond the halls of academic economists. Smith would surely maintain open debate among scholars; he did so with Hume. Adam Smith would likely eschew publishing in a top journal. I think he would prefer to engage the public sphere outside the economics profession.

      The economics profession, and society, would benefit from more economists engaging in public discourse. Sutter and Pjesky’s article opens the door for a discussion on the purpose of the profession.

    • 1 comments
    • First comment 22 Apr 2010 by Jonathon Diesel
    • Last comment 22 Apr 2010 by Jonathon Diesel

20. The Role of Economists in Ending the Draft

    • Great article. I enjoyed reading it. Especially the declaration of economists against the draft …… really nice!

      I am writing a paper against the draft in Austria and found it very useful.
      The situation in Austria is such, that the laws that constitute the draft are even used to legitimize a compulsory civil service. This service is theoretically limited to those who are morally unable to serve with the weapon but has reached a volume of almost 50 % of the draftees. Naturally the labor marked is distorted and the private and public companies that are using the free labour are using their influence to secure their benefits.

      This article showed how this conflict can be won. Thanks….
      Johannes

    • 1 comments
    • First comment 21 Feb 2011 by Johannes Hoyos
    • Last comment 21 Feb 2011 by Johannes Hoyos